Off-Label Use Often Presents Conundrum for Health Plans

Insurers recognize the clinical importance of off-label prescribing, but criteria are needed to avoid overutilization

August 1, 2006

Martin Sipkoff

Off-label prescribing is common, but steeped in contradiction. It is legal, unless a drug company or physician talks too much about it. It is conventional, but based more on anecdote than evidence. Health plans often pay for off-label use, but do not want to admit it.

Medicare also often pays, but the Food and Drug Administration will investigate and the FBI will arrest physicians who assertively promote off-label use of a specific drug. And the FDA will fine drug companies that advertise off-label applications.

The American Medical Association estimates that as many as 40 percent of all prescriptions are issued for off-label use, as shown in a recent study. "One reason is that physicians and patients don't entirely understand how the FDA works," says Randall Stafford, MD, of Stanford University, who recently participated in a study of off-label utilization, the results of which were published in the May 8 issue of Archives of Internal Medicine under the title "Off-label Prescribing Among Office-Based Physicians."

"I think patients] assume that if a drug has made it onto the market, the FDA has vouched for its safety and efficacy for all of its potential uses," he says. "That's simply not the case."

When it was theorized that stomach ulcers were caused by bacteria, doctors tested this theory through the off-label prescription of antibiotics. As doctors discovered and shared information regarding the efficacy of antibiotics against stomach ulcers, amoxicillin and tetracycline were found useful in the treatment of ulcers without any FDA intervention.

"Medications prescribed off label can be extremely helpful. It is important that prescribing decisions are based on clear, scientific evidence," says Henri R. Manasse Jr., PhD, executive vice president and chief executive officer of the American Society of Health-System Pharmacists. "It is important that consumers understand that labeled uses are often limited to how a drug was originally approved by the FDA and may not include other appropriate uses that have proven to be effective. But it is equally important that scientific evidence supports off-label prescribing."

Enter the fed

The federal government generally agrees. Under the Medicare drug benefit, a prescription drug is covered by a Medicare drug plan if it is prescribed for a medically accepted indication. But the feds apparently will not tolerate physicians becoming too aggressive in promoting off-label utilization, as evidenced by the very public arrest of a doctor in New York in March for promoting — through a series of paid speeches and meetings with other physicians — off-label use of a narcolepsy drug for depression and pain.

The study published in Archives found that about 20 percent of medications are prescribed to treat conditions for which the drugs aren't approved by the FDA. What is worrisome about the study, however, is that nearly three-fourths of those uses lack strong scientific support.

Some off-label uses followed logically from FDA-approved indications, says Stafford, such as prescribing asthma medications for other lung diseases, but other off-label prescriptions are for conditions dramatically different from those for which the drug was approved, such as the use of an anticonvulsant drug for chronic pain.

In the Archives study, sponsored in part by the federal Agency for Healthcare Research and Quality, researchers found that 85 percent of the 725 million total prescriptions given for 500 specific, widely-used drugs in 2001 were either for FDA-approved indications or off-label uses with strong scientific support. But of the estimated 150 million (21 percent) prescriptions prescribed off label, most (73 percent, or 15 percent of total prescriptions) lacked scientific support. Physicians frequently reported prescribing off label because they had been informed by other physicians that a certain drug had shown effectiveness in that use.

Off label is, in fact, a major way that the medical community determines drug efficacy, especially if information is shared with colleagues through peer-reviewed journals. When sufficient evidence exists, either through publication of research or through recognition that a limited number of studies were sufficiently rigorous, it is referenced in one of several medical compendiums.

Off-label prescribing is particularly common in oncology and pediatrics. In those disciplines, some diagnoses have no on-label drugs and are treated entirely on an off-label basis.

"When a drug is used off label, it is administered by a different route, in a different dosage, or for a different indication than described in the FDA-approved labeling," says Darren Kocs, MD, an oncologist and researcher at the University of Michigan.

It is at that point that the provider of the pharmaceutical benefit may recognize the clinical value of an off-label use and pay for such use. The growth Xof computerized prescribing also helps payers to enforce limits on off-label prescribing and to monitor physician prescribing patterns. And payment often requires prior authorization, drug utilization review, or audits.

According to a spokesman for Medco, coverage of off-label use of a medication varies by client. Some clients use the approach that Medco advocates, which is that the PBM company's P&T committee reviews and approves coverage criteria, which may include off-label uses based on clinical evidence, including peer-reviewed articles, guidelines, and compendia. Some PBM clients develop their own criteria.

For these reasons, and notwithstanding efficacy and investigative value, health plans have a varied attitude toward off-label prescribing. They vary widely in their protocols for covering it. In fact, to some degree, a shell game is played between plans, physicians, and patients. Doctors may obscure why they are prescribing a drug, and health plans rarely make public their policies on off-label payments. One plan that does so is Univera Healthcare in Buffalo. It provides the following three criteria:

Nonstandard or unevaluated procedures/drugs are not covered.

Individual consideration for off-label use will be considered when the criteria are met and reviewed by a medical director.

A provider requesting payment provides evidence to support the off-label use.

Health plans and PBMs do recognize the need for some off-label use, says Samuel Nussbaum, MD, chief medical officer for WellPoint. "Sometimes this is how a drug is found to be effective for a specific condition, and because most drugs aren't FDA-approved for children, it is how many children are treated," he says. "But the fact remains, off-label utilization can get out of hand."

When must Part D cover drugs used off label?

The health plans and PBM companies with Medicare Part D beneficiaries are required ultimately to cover any drug — unless it is specifically excluded — if the drug is deemed "medically necessary" and "medically accepted," regardless of formulary design.

Drug plans are not required to list off-label uses on formularies, but physicians may still prescribe off-label drugs for medically accepted indications. Physicians must justify off-label use and the indication must be listed in 1 of 4 compendiums accepted by CMS. To justify off-label coverage, the physician must determine that all drugs in a formulary for the treatment of the same condition are ineffective and/or have adverse effects.

There is an appeals process to seek coverage of a nonformulary drug, inducing drug plan review, independent review, an administrative law judge, an HHS appeals board, and the federal courts. The exceptions and appeals process can be initiated by the beneficiary or a physician.